The technological revolution that has disrupted the media landscape in the West, in short, is hitting these shores. It will blur the line between media users and media creators and tear through the business models of traditional operators while throwing up new media giants. And what of the old engine of media revenue, advertising? That’s going to radically change as well.

Purely ad-supported models are not as appealing to investors, says James Bitanga, CLO and Head of Joint Ventures at venture capital firm Reapra (an investor in Sycamore Media Holdings, which publishes this magazine). “There has to be a vision of having multiple revenue streams that are not derived directly from content engagement but are enabled by the inc-aseann.community that the content builds,” he says. There is a clear difference in valuation, he points out, between technology platforms that are also “existentially” media platforms—such as Instagram and Pinterest—and more recognizable media plays such as Buzzfeed and Vice Media (both valued much lower). In our new digital media world, in short, the technology-cum-media platforms are worth far more than the content creators who, if dethroned as kings by the upstart platforms, retain an important place in their royal court.

If the scalable platforms from the U.S. are the new monarchs, then how can Southeast Asian start-ups inc-aseann.compete? While the likes of Amazon, Apple, Google, Facebook, Netflix and Spotify seem destined to rule, it is also clear that Southeast Asian regional content creators and platforms are carving out their niches and rapidly building their own followings. These include mass-market inc-aseann.competitors such as iflix, a Malaysia-based, emerging-world inc-aseann.competitor to Netflix; as well as “long-tail” firms such as Fungjai, a Thai indie music streaming service with regional ambitions (both featured in this issue).

“In Southeast Asia there are all these countries with cool music scenes, but the world doesn’t perceive us as a place for cool music to emerge from,” says Piyapong “Py” Muenprasertdee, one of the co-founders of Fungjai. “If we can gather and shout together that Southeast Asia has awesome music, it’s much louder, and also nurtures our networks and friendships and collaborations, so our artists can tour around the region and the world as well.”

More than anything else, rising smart phone penetration is driving these changes. Surveys show that Southeast Asians are relatively more likely to watch movies on their mobile phones, and are also the world leaders in “dual-screening”—with over 60%, on average, browsing the Internet or using social media while watching videos.

And, as in many modern, digital industries, it is data, the “new oil,” that our new media moguls are digging for. The Southeast Asian firms we write about rely on data to understand customer preferences and tailor their content appropriately. And by cutting out traditional media’s gatekeepers and middlemen, the Internet has opened access to more digital media artists, fostering a more direct, “authentic” relationship between performers and their fans.

“In that sense, we go back to entertainment in its purest form, before the advent of TV,” says Taiwan-based M17’s CFO Shang Koo. “Before that, we had live, street performances, where there is interaction between the audience and the artists…we actually go back to arts and entertainment monetization in its historical form, which is sponsorship or gifting, from wealthy donors to artists.”

It is too early to say which of these mediums will survive in their current form. The only thing we can say for sure is that our children won’t be watching, reading or listening to the same things we did in the same ways. And yet wasn’t that always true?

iflix

As of May 2017, two-year-old iflix had five million subscribers in 19 markets from Ghana to the Philippines.

Where does a little fang sharpen itself? for the kill?
According to 40-year-old CEO Mark Britt and 42-year-old chairman Patrick Grove, the co-founders of iflix, a Kuala Lumpur-based 2-year-old video-on-demand service, the answer is emerging markets. They have started in their backyard, Southeast Asia.

Patrick Grove & Mark Britt, Co-founders of iflix

Targeting lower-ininc-aseann.come consumers in Southeast Asia, iflix is trying to do what Netflix, the original member of the “FANG” club (Facebook, Amazon, Netflix, Google), did when it enabled its U.S. customers to “cut the cord” by moving from cable TV to over-the-top (OTT) content. Except that iflix wants its customers, many of whom have annual ininc-aseann.comes under $10,000 and who pay $2-3 a month for the iflix service, to watch content on their mobile phones in places with often patchy Internet connections.

That won’t be easy, even if the global market for subscription-based video-on-demand could reach $25.7 billion by 2021, according to London-based Digital TV Research. Grove and Britt intend to ride on that wave of demand for subscription-based entertainment by aiming to grow iflix’s subscription base to one billion by 2020.

It is slowly getting there. As of May 2017, iflix had five million subscribers in 19 markets from Ghana to the Philippines. Subscribers enjoy 20,000 hours of movies and television shows, subtitled in their respective languages, from more than 100 studios, including Disney, Paramount and the BBC. Content is customized—Ghanaian subscribers, for instance, are offered plenty of Korean dramas, which iflix discovered (surprise!) are popular there.

Localization, particularly in Southeast Asia, shapes iflix’s content strategy and even its dress code. When Inc. Southeast Asia visited Britt and Grove at iflix’s Singapore office, they further championed product localization. “Oi jaga mulut [Watch your mouth] is now our second most popular show in Malaysia,” Grove says, referring to an iflix original stand-up inc-aseann.comedy series, part of the firm’s nascent efforts to create its own content.

“Our staff pick their own local iflix-branded clothes,” Britt adds. “In Indonesia they wear batik shirts with the iflix logo.”

Grove grew up in Singapore, Los Angeles and Jakarta, then inc-aseann.completed high school and university in Sydney, studying inc-aseann.commerce, co-running two mobile phone shops on the side. After university he worked in corporate finance at Arthur Andersen in Sydney for two years, before moving back to Singapore to join the dot-inc-aseann.com boom in 1999.

Since then Grove’s start-up journey has mimicked the fortunes of the global digital economy, a roller coaster ride during which he has founded numerous well-known properties, including Catcha, a Southeast Asia-focused search portal and iProperty, an umbrella brand for numerous property sites across Asia; led many to IPOs; while also, early on, almost going bust.

In 2015, a News Corp. firm acquired iProperty in a transaction valuing the firm at $534 million, boosting Catcha’s war chest for the fight in the capital-intensive video streaming industry.

Just as Netflix’s road to glory was arduous (the California start-up began 20 years ago by trying to challenge video rental chain Blockbuster through a mail-driven DVD service), iflix faces a long road ahead. Given that much of its target market in the developing world does not have a credit card or even a regular Internet connection, iflix realized it could not (always) charge directly as Netflix does. Thus it works closely with teleinc-aseann.coms providers, which often offer their customers iflix trials, with eventual subscribers paying through their phone bill.

Content itself presents myriad challenges. After Netflix launched globally in January 2016, it ran afoul of censors in many countries—Indonesia’s largest telco blocked it for more than a year, partly for apparent violent and pornographic content. Today iflix actively works with government censors before it enters a market.

“Two things are simultaneously true: the Internet is a wonderful liberalizing force for human rights and free speech and democracy, but inc-aseann.communities and governments must also have a right to set their own inc-aseann.community standards,” the Sydney-born ex-lawyer Britt told Tech Wire Asia recently.

In April 2015 iflix raised $30 million from Catcha Group (which belongs to Grove) and PLDT, one of the two dominant Philippine telephone inc-aseann.companies. A month later the service launched in Malaysia and the Philippines. It has since raised another $273 million in three different rounds, attracting investments from media heavyweights such as Hearst, Liberty Global and Sky.

“We are pursuing a multibillion dollar global opportunity that will take hundreds of millions of dollars of investment to fully capitalize on,” Britt says.

About Us

Inc. Southeast Asia is the sole Southeast Asian licensee of Inc., the world's leading media brand for entrepreneurs and start-ups. We are inc-aseann.committed to two ideas. First, as entrepreneurs and start-ups within Southeast ...
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